DealZone

Swiss drugmaker Novartis is, as expected, exercising an option to buy a 52 percent stake in world-leading eye care firm Alcon from Nestle. It is paying $28.1 billion for Nestle’s stake, bringing its holding to 77 percent, and aims to buy out the remaining 23 percent of the company held by minority shareholders for $11.2 billion. What’s raising eyebrows is the offer of 2.80 Novartis shares for each remaining Alcon share, which amounts to just $153 per share compared with the $180 agreed with Nestle.

Novartis already owns CIBA Vision, the contact lens business, and is ogling an enlarged eye care business with pro-forma 2008 net sales of $8.5 billion. Analysts say it will ultimately need to offer minority shareholders more to get them on board.

What might be more eye-catching in this deal is what it could mean for another one. All cashed up, might Nestle – better known for KitKats than contact lenses – wade into the Cadbury deal, giving suitor Kraft’s bid some serious competition?

Nestle said the deal would allow it to launch a new $9.64 billion share buyback program. While Nestle has indicated it is only in the M&A market for smaller deals, that kind of money could well wind up burning a big hole in its pocket, one that is a couple of billion bigger than the $16.2 billion offer Kraft already has on the table.

Lehman Brothers is considering selling all or part of its asset management unit – anchored by Neuberger Berman and thought to be worth about $8 billion — by the time it releases third quarter earnings. That would be more than enough to fill the $4 billion dollars in write-downs JP Morgan says the bank will have to take in the quarter, but sources say it’s not clear if all or part of the investment management business would be sold. Some have said an outright sale of the entire investment management business could be tough, as it would be too big for most buyers to swallow. One source familiar with the situation said Lehman is marketing its asset management unit to a number of buyers including private equity firms. A second said Lehman is looking at several alternatives including selling a stake in the business.

General Dynamics has agreed to acquire Zurich-based Jet Aviation, a privately held provider of business-aviation services, for about $2.25 billion in cash. The U.S. defense contractor said the deal, which would expand its flight support services, is expected to immediately add to its earnings and should close by the end of the year. Jet Aviation is currently owned by private equity firm Permira Funds. It provides maintenance, repair and overhaul services for business jets. It also charters executive jets.

Tata Consultancy Services is close to acquiring Citigroup‘s backoffice unit in India for up to $550 million, the Economic Times reports, citing a source close to the development. The announcement of a deal for Citigroup Global Services is likely to be made “within three weeks”, the paper said, adding that Tata, India’s top software services exporter, has edged out IBM in the race for the Citi unit.